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Opportunities for increased profit and reduced cost and emissions by service differentiation within container liner shipping

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  • Haakon Lindstad
  • Bjørn Egil Asbjørnslett
  • Anders H. Strømman

Abstract

This paper investigates opportunities for increased profit and reduced emissions and cost by service differentiation within container shipping. Traditionally the strategy among the container lines has been profit maximization by utilizing economies of scale through the building of larger and faster vessels. In 2008, the financial crisis in combination with higher fuel prices put an end to this progress and in today’s market operators are basically trying to survive by providing standardized services at the lowest possible cost. This study investigates alternative strategies and the results indicate that container lines should provide two different services instead of one standardized service. A fast service to be more competitive versus air freight for fast-moving goods and a slow service to be more competitive versus traditional shipping types for transport of minor bulk, break bulk, liquid bulk and project cargo.

Suggested Citation

  • Haakon Lindstad & Bjørn Egil Asbjørnslett & Anders H. Strømman, 2016. "Opportunities for increased profit and reduced cost and emissions by service differentiation within container liner shipping," Maritime Policy & Management, Taylor & Francis Journals, vol. 43(3), pages 280-294, April.
    • Handle: RePEc:taf:marpmg:v:43:y:2016:i:3:p:280-294
    DOI: 10.1080/03088839.2015.1038327
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    References listed on IDEAS

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    1. Lindstad, Haakon & Asbjørnslett, Bjørn E. & Strømman, Anders H., 2011. "Reductions in greenhouse gas emissions and cost by shipping at lower speeds," Energy Policy, Elsevier, vol. 39(6), pages 3456-3464, June.
    2. Lindstad, Haakon & Asbjørnslett, Bjørn E. & Strømman, Anders H., 2012. "The importance of economies of scale for reductions in greenhouse gas emissions from shipping," Energy Policy, Elsevier, vol. 46(C), pages 386-398.
    3. Leachman, Robert C., 2008. "Port and modal allocation of waterborne containerized imports from Asia to the United States," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 44(2), pages 313-331, March.
    4. Notteboom, Theo E. & Vernimmen, Bert, 2009. "The effect of high fuel costs on liner service configuration in container shipping," Journal of Transport Geography, Elsevier, vol. 17(5), pages 325-337.
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    Cited by:

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    2. Xing, Hui & Spence, Stephen & Chen, Hua, 2020. "A comprehensive review on countermeasures for CO2 emissions from ships," Renewable and Sustainable Energy Reviews, Elsevier, vol. 134(C).
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    4. Zeeshan Raza & Johan Woxenius, 2023. "Customer‐driven sustainable business practices and their relationships with environmental and business performance—Insights from the European shipping industry," Business Strategy and the Environment, Wiley Blackwell, vol. 32(8), pages 6138-6153, December.
    5. Yuen, Kum Fai & Wang, Xueqin & Wong, Yiik Diew & Ma, Fei, 2019. "A contingency view of the effects of sustainable shipping exploitation and exploration on business performance," Transport Policy, Elsevier, vol. 77(C), pages 90-103.

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